Something unusual is happening in the U.S. economy right now. Money is flowing backwards. Billions of dollars that were collected from American businesses as import duties are now being sent back – and some of those checks are already landing in bank accounts. For anyone who imports goods into the United States, or runs a business that does, the next few months could look very different than the last year and a half.
The story behind these refunds starts, as most big policy stories do, with a legal battle that seemed unlikely to succeed. A small wine importer from New York. An educational toy company. A coalition of states. All of them arguing that the tariffs squeezing their businesses were never legal in the first place. Most observers expected the administration’s trade agenda to survive scrutiny. It didn’t.
What happened next set off one of the largest government reimbursement processes in American history. If you run a business that imports goods, there’s a real chance you’re owed money. If you’re a consumer who spent the last year paying more for groceries, electronics, furniture, and clothing, the question of whether any of that money comes back to you is considerably more complicated.
The Court Case That Changed Everything
On February 20, 2026, the U.S. Supreme Court issued its decision in Learning Resources, Inc. v. Trump and Trump v. V.O.S. Selections, Inc., two cases centered on tariffs President Trump had imposed using the International Emergency Economic Powers Act, or IEEPA, a 1977 law that had historically been used to freeze assets and impose economic sanctions rather than tariffs. In an opinion written by Chief Justice John Roberts, the Court held that IEEPA does not give the president authority to impose tariffs.
The justices, divided 6 to 3, held that Trump’s approach to tariffs on products entering the United States from across the world was not permitted under the 1977 law. Chief Justice Roberts found it “telling” that IEEPA had never been used to impose tariffs from its enactment in 1977 until 2025.
The Court affirmed a lower court decision that invalidated two sets of IEEPA tariffs: one on imports from Canada, Mexico, and China based on declared emergencies concerning illicit drugs, and another on most other U.S. imports based on a declared emergency concerning the U.S. trade deficit. While the ruling strikes down the IEEPA tariffs, it does not affect the industry-specific Section 232 tariffs. Those tariffs, which cover products including steel, aluminum, autos, and heavy trucks, remain in place.
Victor Schwartz, who runs New York-based wine and spirits importer VOS Selections, said in a statement: “These new tariffs were arbitrary, unpredictable, and bad business.” He added that “courts at every level recognized these duties for what they were: unconstitutional government overreach.”
The Refund Process Begins
Schwartz, whose company was one of the small businesses fighting in the Supreme Court case, confirmed via his lawyers that a $110,000 tariff refund hit his bank account. He is among the earliest to receive payment, but he is far from the last.
According to U.S. Customs and Border Protection, the agency has processed and is on track to disperse more than $35 billion in refunds to importers who paid tariffs that the Supreme Court struck down. The payments are being processed through a new online government portal and will include interest on duties paid across more than 8 million import entries.
As of May 11, the tool designed to handle claims on the $166 billion in duties that were overturned had validated nearly 87,000 declarations. About 126,000 declarations had been received in total since the system launched on April 20.
CBP has represented to the Court of International Trade that more than 330,000 importers paid approximately $166 billion in IEEPA duties across more than 53 million entries. The refund volume will be the largest in CBP history.
The cost to ordinary households has been real. The Budget Lab at Yale found that before the IEEPA tariffs were struck down, consumers faced an overall average effective tariff rate of 16%, the highest since 1936. That money was passed through the supply chain in the form of higher prices for goods ranging from electronics to clothing to food. The refunds now flowing back into corporate accounts represent the government unwinding a policy the courts ruled was never lawful.
Who Qualifies – and How to File
This is where many importers need to pay close attention, because eligibility is narrower than most headlines suggest.
CBP developed the Consolidated Administration and Processing of Entries system, known as CAPE, within the Automated Commercial Environment to streamline the submission and processing of refund requests for duties imposed under IEEPA. CAPE is designed to consolidate refunds of IEEPA duties including interest, rather than processing refunds on an entry-by-entry basis.
If your business imported into the United States between March 2025 and February 24, 2026, you almost certainly paid IEEPA tariffs. Whether you can claim a refund depends on which phase of CAPE you fall into and what your entry status looks like.
For Phase 1, which covers unliquidated entries or entries within the 90-day voluntary reliquidation period, you do not need to file a case with the Court of International Trade to receive an IEEPA refund. Only the importer of record or the licensed customs broker who filed the entries can file a CAPE Declaration.
“Liquidation” simply means whether CBP has finalized its assessment of the duties, taxes, and fees owed on a shipment. An unliquidated entry is one that CBP has received but not yet finalized. During this period, CBP may review the entry details and confirm the final duty assessment. Once an entry is liquidated, CBP has completed its review and the entry is generally considered closed.
Phase 1 is limited to unliquidated entries and entries within 80 days of liquidation. Entries that have fully liquidated beyond that window, entries with drawback or reconciliation flags, and entries where a surety paid the duty are excluded from Phase 1.
For importers with older, fully-liquidated entries that fall outside Phase 1, there is still a path forward. Importers can ask their customs broker about filing a Section 1514 protest using CBP Form 19, while still within the 180-day window from liquidation.
Section 122 and Section 232 tariffs are not affected by the CAPE refund process. The 10% global Section 122 surcharge that replaced IEEPA on February 24, 2026 is legally distinct and is not eligible for CAPE refund. Section 232 tariffs on steel, aluminum, autos, copper, lumber, and semiconductors remain in force and are not refundable.
The Step-by-Step Path to a Refund
For importers ready to file, the CBP’s official IEEPA Duty Refunds page is the primary resource. The process runs through the ACE Secure Data Portal.
Beginning April 20, importers of record, or their authorized customs brokers, may submit IEEPA tariff refund requests electronically through the ACE Secure Data Portal using the CAPE tool.
ACE is required to pursue and receive IEEPA tariff refunds. Importers cannot access the CBP CAPE process without an ACE account, and refunds cannot be issued without both ACE access and ACH enrollment for electronic payment.
To provide your refund bank account information, you will need to have the “Importer” sub-account in the ACE Portal. Refunds include statutory interest from the original entry date – 7% per year for individual importers and 6% for corporations, compounded daily under 19 CFR 24.36.
More than 1,880 consolidated refunds have not yet been sent to Treasury because the importer had not yet provided bank account information. Having your ACH details current in the system is not optional.
Once your CAPE Declaration is submitted, importers and authorized brokers should anticipate that valid IEEPA refunds will generally be issued within 60 to 90 days following acceptance of the CAPE Declaration, unless a compliance concern requires further CBP review.
CBP had said in earlier court filings that the first phase won’t be able to accept claims for more than a third of the import entries at issue. The remaining entries have more complicated circumstances, and Customs officials haven’t specified a schedule for rolling out future phases of the refund program.
The message for importers: get organized now. Businesses with clean records, confirmed ACE access, and their ACH enrollment in order are moving to the front of the queue. Those waiting for Phase 2 guidance should ensure all documentation, including Form 7501 entry summaries and proof of duty payments, is preserved and ready. For entries outside Phase 1, working with your customs broker on a Section 1514 protest remains the most direct alternative route while CBP develops its broader rollout plan.
What This Means for Consumers – The Hard Truth
For the millions of American households who absorbed the cost of these tariffs in higher prices at the register, the honest answer is that a direct refund check is not coming.
Refunds flow only to the Importer of Record – the company that paid the duty – not to the consignee, foreign supplier, or whoever actually absorbed the tariff cost in the supply chain. Companies are under zero legal obligation to pass the money to the households that absorbed the cost in higher prices for groceries, electronics, clothing, and furniture.
Some state officials are pushing back on this. Several Democratic-led states raised the issue in a letter sent to Trump, calling for “public disclosure of all refund applications,” accounting for costs passed on to small businesses and the public, and for American consumers to be included in reimbursements. Minnesota State Auditor Julie Blaha said refunds for consumers could be handled several ways, including direct payments to Americans based on estimates of the tariffs’ household impact, or having businesses determine and dole out reimbursements to their customers.
A few companies have pledged partial pass-through. But most consumers will not see direct refunds. Any consumer-level benefit will show up as gradual pricing changes in 2026 and 2027.
A 2026 analysis from the Federal Reserve Bank of New York concluded that “U.S. firms and consumers continue to bear the bulk of the economic burden of the high tariffs imposed in 2025.” As the average U.S. tariff on imports climbed to 13% in 2025, up from less than 3%, nearly 90% of the tariffs’ economic burden fell on U.S. firms and consumers. Even with the IEEPA tariffs struck down, other duties remain – the broader picture of tariff costs on American households is still evolving.
What the Ruling Really Changed
The Supreme Court’s decision is significant beyond the refund checks. The ruling establishes a firm limit on how far a president can stretch emergency powers to rewrite trade policy, and that matters for every business that imports goods into the United States.
For importers, the practical takeaway is straightforward: the legal architecture of U.S. tariffs has changed. IEEPA can no longer serve as a blank check for sweeping import taxes. Future administrations will need to work through Congress or rely on more specific trade statutes, like Section 232 or Section 301, which remain valid but have narrower scope and are subject to their own procedural requirements.
For consumers, the ruling is more of a structural guardrail than a direct financial remedy. It means the kind of broad, emergency-declared tariff regime that raised prices across virtually every product category – from appliances to avocados – requires proper congressional authorization going forward. That doesn’t reverse the price increases already absorbed over the past year, but it does constrain the playbook available to future administrations.
Major importers, from automakers to apparel companies, have already signaled that they expect meaningful profit improvements from tariff reimbursements. Whether competitive pressure eventually pushes some of those savings toward lower consumer prices remains to be seen – and it won’t happen quickly. But the legal precedent now on the books is clear: declaring a permanent state of economic emergency is not a substitute for congressional authority on trade.
Disclaimer: This information is not intended to be a substitute for professional financial advice, investment advice, tax advice, or legal advice, and is provided for informational purposes only. Always seek the guidance of a qualified financial advisor, accountant, or other licensed professional regarding your personal financial situation or investment decisions. Do not make financial, investment, or tax decisions based solely on information presented here. Past performance is not indicative of future results, and all investments carry risk, including the potential loss of principal.
AI Disclaimer: This article was created with the assistance of AI tools and reviewed by a human editor.
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